Archive for December, 2006

First Mover Advantage?

Posted on December 9, 2006. Filed under: Uncategorized |

This post is influenced by two big events in my life recently – the completion of an entire code rewrite for boso and the move of all my old school friends on facebook. The two probably seem unrelated (and probably not very interesting to you right now) but I’ll provide some context which should explain why they raise some pretty important issues regarding launching web products.

So anyone that knows me well will know that the number one biggest problem we’ve had with boso is launching a well-written, maintainable and bug free site that people enjoy using (yes I know that’s a fairly fundamental problem when your whole business is a website). Without going into detail, a month back we reached a point where our site was just about workable but much like a sinking ship – when we plugged a leak in one place another one springed up somewhere else. At the same time I was getting impatient about the fact we weren’t doing any real marketing to get ourselves out there. I discussed this with Kul and he strongly argued that any marketing spend would be wasted if we had a site with bugs on it. I disagreed and thought we were losing valuable time and ground on our competitors – we had to start getting ourselves out there asap. With the split in our roles (I’m product and Kul is distribution – everything else is irrelevant right now), I trusted Kul’s judgement and set about concentrating on how to solve the problem we were in with our site. To cut a long story short, we went for a complete site rewrite with code that is 100x more maintainable and will speed up the development process no end. During that time we’ve done next to no marketing and looking back, Kul was 100% spot on. It would have been foolish to have done any marketing during that time and let me explain why by coming back to that other event – the move of my school friends onto Facebook.

I’ve pretty much lost touch with most (nearly all) of my school friends since I came to uni. During that time though I have received email invitations from them to sites like Ringo, hi5, etc. Without wanting to sound like a snob, I find these sites horrible to use and I take particular offence to the way they enjoy sending out email invitations to all of your friends without you realising. The fact they have nasty user interfaces also makes me that extra bit certain I’m not going to register on them. So this network of people were all happily using their own social networks online – they had Ringo to share their photos, hi5 to do that token bit of online social networking and I also found they were all using MySpace to satisfy that exhibitionist urge that lurks in each of us. Over the past week they have all, and I mean ALL, come onto facebook and I just can’t help but wonder why. I mean after all isn’t the whole idea of social networking that you go to the ones where all of your friends are? So why would you ever switch to one where less of them are?

That’s when I started thinking back to what Kul had said – without a solid product marketing is pointless (I think he quoted the head of marketing at Remington who says “Rule Number 1 of marketing is have a great product. Rule Number 2 is don’t forget Rule Number 1”. A little bit cheesy for my liking but a point well made). Without asking every one of my old school friends I can only guess as to why they made the move but I have to say I think it’s because facebook is just leaps and bounds ahead of any other social networking site out there. The UI is spot on and the range of features is virtually unparalled in the social networking space. The thing that amazes (and scares) me most about facebook is the feeling that they could add anything to their product and they’d do it in an innovative way that enhances the social network. While they keep doing that I think the future looks pretty bright.

So then I compare facebook to its UK equivalent (or so says the Guardian) – Univillage. Kul has met the univillage guys and says they are great people so I don’t intend for any of the following to be taken personally – I’m ecstatic that more people in the UK are entering the webscene and I have 100% respect for what they’ve achieved so far. However this morning I received a Merry Xmas email from them in which they said they’re giving away 100 headsets worth £25 each. The first thought that struck me was the fact I would never in a million years expect to receive an offer like that from facebook. In fact come to think about it, just how much marketing have facebook ever done? Even now they’re facing stiff competition I still don’t see facebook posters or flyers (of the real kind) around anywhere. And yet they seem to be growing in the UK at a crazy rate, what is the explanation for it? Again the only thing I can think about is the fact that purely from a product perspective, they offer something better than anyone else. While marketing spends from other services may result in a short term spike in traffic and users, I still feel that in the long term facebook will still win if they keep offering a better product.

I’m beginning to feel more and more like the concept of first mover advantage is a myth. Having the best product gives you a real advantage, everything else gives you a short term one. The challenge then becomes keeping your early users locked in and ultimately the only way this will happen is if they’re happy with the product you’re giving them. I recently read a 37signals blog post where they described the difference between trying something and using it. I really believe that people will generally try anything but use only those things they feel offer the best service possible. Ultimately everything beings and ends with this service and all other things are really secondary (unless you’re dealing with something based purely on hype e.g. Milliondollar Homepage or the Crazy Frog).

Over and out.

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